STRICTLY CONFIDENTIAL CONFORMED COPY
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MASTER AGREEMENT
Between
FIAT S.p.A.
and
GENERAL MOTORS CORPORATION
Dated as of March 13, 2000
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NYDOCS02/508729.13
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions ...................................................2
SECTION 1.02 Other Definitions .............................................3
SECTION 1.03 Interpretation, Certain Definitions ...........................5
ARTICLE II
SHARE PURCHASE AND SUBSCRIPTION
SECTION 2.01 Purchase of General Motors Shares .............................6
SECTION 2.02 Subscription for FAH Shares ...................................6
SECTION 2.03 Purchase Price and Subscription Price .........................7
SECTION 2.04 Closing .......................................................7
SECTION 2.05 Closing Deliveries ............................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FIAT
SECTION 3.01 Organization and Qualification ................................8
SECTION 3.02 No Conflict; Required Filings and Consents ....................8
SECTION 3.03 FA, Fiat Auto Holdings and Fiat Auto ..........................9
SECTION 3.04 Absence of Litigation .........................................9
SECTION 3.05 SEC Filings ..................................................10
SECTION 3.06 Financial Statements .........................................10
SECTION 3.07 Absence of Certain Changes or Events .........................10
SECTION 3.08 FAH Shares ...................................................11
SECTION 3.09 Capitalization of Fiat Auto Holdings .........................11
SECTION 3.10 Investment Purpose ...........................................11
SECTION 3.11 Brokers ......................................................11
SECTION 3.12 Securities Laws ..............................................11
SECTION 3.13 Assets .......................................................11
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GENERAL MOTORS
SECTION 4.01 Organization and Qualification ...............................12
SECTION 4.02 No Conflict; Required Filings and Consents ...................12
SECTION 4.03 Absence of Litigation ........................................13
SECTION 4.04 SEC Filings ..................................................13
SECTION 4.05 Financial Statements .........................................13
SECTION 4.06 Absence of Certain Changes or Events .........................14
SECTION 4.07 Investment Purpose ...........................................14
SECTION 4.08 General Motors Common Stock ..................................14
SECTION 4.09 Brokers ......................................................14
SECTION 4.10 Securities Laws ..............................................14
ARTICLE V
JOINT VENTURES AND COOPERATION
SECTION 5.01 Powertrain Joint Venture .....................................14
SECTION 5.02 Purchasing Joint Venture .....................................14
SECTION 5.03 Credit Cooperative Agreement .................................15
SECTION 5.04 Cooperation ..................................................15
SECTION 5.05 Steering Committee ...........................................16
SECTION 5.06 General Provisions ...........................................17
ARTICLE VI
COVENANTS
SECTION 6.01 Restrictive Legend ...........................................18
SECTION 6.02 Access to Information ........................................18
SECTION 6.03 Conduct of Joint Venture Businesses ..........................19
SECTION 6.04 Formation of Fiat Auto Holdings and Fiat Auto ................19
SECTION 6.05 Appropriate Action; Consents; Filings ........................19
SECTION 6.06 Notification of Certain Matters ..............................21
SECTION 6.07 Public Announcements .........................................21
SECTION 6.08 Standstill ...................................................21
SECTION 6.09 Confidentiality ..............................................22
SECTION 6.10 Certain Rights of the Parties ................................23
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ARTICLE VII
CONDITIONS TO THE CLOSING
SECTION 7.01 Conditions to the Obligations of Each Party ..................25
SECTION 7.02 Conditions to the Obligations of Fiat ........................25
SECTION 7.03 Conditions to the Obligations of General Motors ..............26
ARTICLE VIII
TRANSFERS OF FIAT AUTO HOLDINGS SHARES
SECTION 8.01 Transfer of Shares ...........................................27
SECTION 8.02 Right of First Offer .........................................27
SECTION 8.03 Put Option ...................................................30
SECTION 8.04 Public Offering ..............................................34
SECTION 8.05 Freely Transferable ..........................................35
SECTION 8.06 Extension ....................................................35
SECTION 8.07 Change in Control ............................................35
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination ..................................................36
SECTION 9.02 Effect of Termination ........................................37
SECTION 9.03 Amendment ....................................................37
SECTION 9.04 Waiver .......................................................37
SECTION 9.05 Expenses .....................................................37
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Survival of Representations, Warranties and Agreements ......37
SECTION 10.02 Notices .....................................................37
SECTION 10.03 Severability ................................................39
SECTION 10.04 Entire Agreement; Assignment ................................39
SECTION 10.05 Parties in Interest .........................................39
SECTION 10.06 Specific Performance ........................................39
SECTION 10.07 Governing Law ...............................................39
SECTION 10.08 Mediation ...................................................40
SECTION 10.09 Consent to Jurisdiction .....................................40
SECTION 10.10 Counterparts ................................................40
SECTION 10.11 Waiver Of Jury Trial ........................................40
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EXHIBITS
Exhibit 5.01 - Powertrain Joint Venture Summary of Terms
Exhibit 5.02 - Purchasing Joint Venture Summary of Terms
Exhibit 5.03 - Credit Cooperative Summary of Terms
Exhibit 5.04(d) - Shared Services Companies
Exhibit 6.04 - Fiat Auto Restructuring
Exhibit 8.03(a)(ii) - Investment Banks
Exhibit 8.03(a)(iii) - Fair Market Value Assumptions
Exhibit 8.03(a)(iv) - Put Agreement Summary of Terms
Exhibit 8.03(d)(ii) - Promissory Note Term Sheet
MASTER AGREEMENT dated as of March 13, 2000 (this
"Agreement"), between FIAT S.p.A., a corporation organized under the laws of
Italy ("Fiat"), and GENERAL MOTORS CORPORATION, a Delaware corporation ("General
Motors").
WHEREAS, Fiat is the parent company of the Fiat Group, is
listed on the Milan, Frankfurt, Paris and New York Stock Exchanges, and owns
directly 99.7% of the capital stock of Fiat Auto S.p.A. ("FA") and holds the
remaining .03% of FA's capital stock through a Subsidiary (as defined herein);
WHEREAS, General Motors is a Delaware corporation which
derives the major portion of its revenues from the automotive and
telecommunications industries, whose common stock, par value $12/3 per share
(the "General Motors Common Stock"), and Class H common stock, par value $0.10
per share, are listed on the New York and other stock exchanges;
WHEREAS, Fiat and General Motors wish to cooperate in
certain automobile related businesses, including the development of common
platforms and components, common powertrains, common credit company back-office
operations and common purchasing operations, with a view towards achieving
significant cost reductions in the automobile manufacturing process (the
"Cooperative Arrangement");
WHEREAS, notwithstanding the Cooperative Arrangement, Fiat
and General Motors intend to remain independent competitors of each other in the
automobile business in their respective markets;
WHEREAS, Fiat and General Motors wish to establish, on the
terms and conditions set forth in this Agreement, two or more joint ventures and
one or more cooperative arrangements to be jointly owned and/or managed by
General Motors or one of its Subsidiaries and Fiat or one of its Subsidiaries
which will combine the operations of Fiat Auto and the European and South
American operations of General Motors in the areas of: (i) the design,
manufacture and sale of automobile powertrains; (ii) the purchase of parts and
supplies for the manufacturing of automobiles; and (iii) the automobile credit
operations back-office (collectively, the "Joint Venture Businesses");
WHEREAS, Fiat and General Motors wish to provide a
framework to explore the feasibility of cooperation in (i) the development of
common platforms in order to reduce investment and research and development
expense and maximize the number of common components employed in Fiat's and
General Motors' respective automobiles; (ii) studying the feasibility of
importing Fiat Auto products into the United States with the support of the
General Motors distribution network; and (iii) research and development
activities;
WHEREAS, in order to strengthen and confirm the parties'
commitment to cooperation, to help minimize possible conflicts as to the
allocation between the parties of the benefits of such cooperation, and to
permit each party to participate in the appreciation in the equity value of the
other party expected to be derived from such cooperation, the parties have
agreed that General Motors, or one of its Subsidiaries, will subscribe for newly
issued shares of common stock (the "Fiat Auto Holdings Common Stock")
representing 20% of the outstanding common equity of Fiat Auto Holdings (as
defined below), and Fiat or one of its Subsidiaries will acquire 32,053,422
shares of General Motors Common Stock, on the terms and conditions set forth in
this Agreement (each such share transaction being a "Share Transaction"; and the
Share Transactions, the formation of the Joint Ventures (as defined below) and
the Credit Cooperative (as defined below) and the other transactions
contemplated hereby being the "Transactions"); and
WHEREAS, in connection with the Transactions, the parties
(i) have required the reorganization of the corporate structure of Fiat and its
Subsidiaries, (ii) may require the reorganization of General Motors in Europe;
and (iii) in consideration of their respective interests in the Benelux
countries, have agreed to establish a new holding company to be organized under
the laws of The Netherlands which at the Closing (as defined below) will be
owned 80% by Fiat or one of its Subsidiaries and 20% by General Motors or one of
its Subsidiaries ("Fiat Auto Holdings") and to a Subsidiary of which Fiat will
cause to be transferred the current business and assets of FA in the manner
contemplated by this Agreement (the Subsidiary holding such business being "Fiat
Auto"), and (iv) have agreed that General Motors may require Fiat Auto Holdings
to issue at the Closing to, or after the Closing General Motors may transfer
ownership of its shares of Fiat Auto Holdings Common Stock to, a new holding
company (which shall be a Subsidiary of General Motors) all in a manner
consistent with the economic intent of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Fiat and General Motors hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of a specified Person means a Person who
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under Common Control with (each as defined below), such
specified Person.
"Business Day" means any day on which banks are not
required or authorized to close in New York, New York, or Milan, Italy.
"Change of Control" means, with respect to any Person, any
of the following, occurring in a single transaction or as part of a series of
related transactions: (a) the acquisition by another Person (including, for
purposes of this definition, a "group" as defined under Regulation 13D-G under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of all or
substantially all the assets of the first Person and its Subsidiaries, taken as
a whole, (b) the acquisition by another Person of more than 50% of the voting
power of the first Person then outstanding, and (c) the merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
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transaction involving the first Person whereby more than 50% of the voting power
of the surviving entity is owned or controlled by another Person.
"Control" (including the terms "Controlled by" and "under
Common Control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise.
"Governmental Authority" means any United States domestic
(federal, state or local) or foreign or supranational government, or
governmental, regulatory or administrative authority, agency or commission or
any court, tribunal, or judicial or arbitral body.
"Law" means any United States domestic (federal, state or
local) or foreign or supranational government, or governmental, regulatory or
administrative law, rule, regulation, order, judgment or decree.
"Material Adverse Effect" with respect to a Person means
any change, effect or circumstance that is or is reasonably likely to be
materially adverse to the business, results of operations or financial condition
of such Person and its Subsidiaries, taken as a whole, other than any change,
effect or circumstance relating to or resulting from (i) general changes in the
automobile industry, (ii) changes in general economic conditions or securities
markets in general or (iii) this Agreement or the Transactions.
"Order" means order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"Permitted Transferee" means, with respect to either party
hereto, any Subsidiary of such party that expressly assumes the obligations of
such party under this Agreement.
"Person" means an individual, corporation, limited
liability company, partnership, limited partnership, syndicate, person, trust,
association or entity or government, political subdivision, agency or
instrumentality of a government.
"Subsidiary" of any Person means any corporation,
partnership, joint venture or other legal entity of which such Person (either
alone or through or together with any other Subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.
SECTION 1.02 Other Definitions. The meanings of the
following terms can be found in the Sections of this Agreement indicated below:
TERM SECTION
---- -------
Acceptance Notice Section 8.02(a)
Agreement Preamble
Appointed Bank Section 8.03(a)(ii)
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TERM SECTION
---- -------
Appointment Date Section 8.03(a)(ii)
Approved Banks Section 8.03(a)(ii)
Blue Sky Laws Section 3.02(b)
Closing Section 2.04
Closing Date Section 2.04
Cooperative Arrangement Recitals
Credit Cooperative Section 5.03
Credit Cooperative Agreement Section 5.03
Disclosing Party Section 6.09
Discussion Period Section 8.03(a)(i)
Exchange Act Section 2.01(b)
FA Recitals
FA Financial Statements Section 3.06
FAH Shares Section 2.02
Fair Market Value Section 8.03(a)
Fiat Preamble
Fiat Auto Recitals
Fiat Auto Common Stock Section 3.09
Fiat Auto Holdings Recitals
Fiat Auto Holdings Common Stock Recitals
Fiat Disclosure Schedule Article III
Fiat SEC Reports Section 3.05
Floor Price Section 8.02(d)
General Motors Preamble
General Motors Common Stock Recitals
General Motors SEC Reports Section 4.04
General Motors Shares Section 2.01(a)
HSR Act Section 3.02(b)
Independent Banks Section 8.02(a)(ii)
Initial Notice Section 8.02(a)
Investment Banks Section 8.03(a)(ii)
IPO Price Section 8.04(a)
IPO Shares Section 8.04(a)
Italian Accounting Principles Section 3.06
Joint Ventures Section 5.02
Joint Venture Agreements Section 5.02
Joint Venture Businesses Recitals
JV Term Sheets Section 5.03
NYSE Section 3.02(b)
Offer End Date Section 8.02(d)
Offer Notice Section 8.02(a)
Offer Period Section 8.02(a)
Offered Shares Section 8.02(a)
Powertrain JV Section 5.01
Powertrain JV Agreement Section 5.01
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Price Negotiation Period Section 8.02(a)
Proprietary Information Section 6.09
Purchaser Section 8.02(d)
Purchasing JV Section 5.02
Purchasing JV Agreement Section 5.02
Put Agreement Section 8.03(a)(iv)
Put Closing Section 8.03(c)
Put Notice Section 8.03(b)
Put Period Section 8.03(a)
Put Price Section 8.03(a)(xi)
Put Shares Section 8.03(a)
Receiving Party Section 6.09
Reduced Price Section 8.02(c)
Rejection Date Section 8.02(c)
Representative Section 6.09
ROFO Period Section 8.02(a)
ROFO Purchase Agreement Section 8.02(b)
Sale Notice Section 8.02(a)
Sale Shares Section 8.02(f)
SEC Section 3.05
Securities Act Section 3.02(b)
Share Transaction Recitals
Shared Services Companies Section 5.04(d)
Steering Committee Section 5.05(a)
Transactions Recitals
Valuation Notice Section 8.03(a)
SECTION 1.03 Interpretation, Certain Definitions. When a
reference is made in this Agreement to an Article, Section or Exhibit, such
reference shall be to an Article or Section of, or an Exhibit to, this Agreement
unless otherwise indicated. The table of contents and headings for this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such statute as from time to time amended, modified or
supplemented, including (in the case of statutes) by succession of comparable
successor statutes. References to a Person are also to its permitted successors
and assigns. References to amounts of currency are references to United States
5
Dollars unless otherwise indicated. The use of "or" is not intended to be
exclusive unless expressly indicated otherwise.
ARTICLE II
SHARE PURCHASE AND SUBSCRIPTION
SECTION 2.01 Purchase of General Motors Shares. (a) At the
Closing, upon the terms and subject to the conditions set forth in this
Agreement, General Motors shall issue and sell to Fiat or one of its
Subsidiaries, and Fiat or one of its Subsidiaries shall purchase from General
Motors, 32,053,422 newly issued shares (the "General Motors Shares") of General
Motors Common Stock. The purchase price for the General Motors Shares shall be
$2.4 billion, payable to General Motors in immediately available funds as
provided below. General Motors may, in its sole discretion, choose to re-issue
shares of General Motors Common Stock held in its treasury in lieu of newly
issued shares. The number of General Motors Shares shall be subject to
adjustment in accordance with paragraph (b) below.
(b) If, prior to the Closing, (i) the outstanding shares of
General Motors Common Stock as a class shall have been increased, decreased,
changed into or exchanged for a different number or class of shares or
securities as a result of a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, combination or exchange of
shares or other similar change in capitalization, or (ii) shares of General
Motors Common Stock are issued for consideration less than fair market value on
the date of issue (other than shares issued on exercise of employee options the
exercise price for which represented fair market value at the date of grant or
upon conversion or exchange of convertible or exchangeable securities the
conversion or exchange price of which was not less than the fair market value
on the date of issue) or if shares of General Motors Common Stock are
repurchased or redeemed at a price greater than fair market value on the date
of repurchase or redemption, then an appropriate and proportionate adjustment
shall be made to the number of shares of such stock to be acquired pursuant to
paragraph (a) above, without changing the purchase price therefor; provided,
however, that neither (i) the exchange offer recently announced by General
Motors for the exchange of shares of its Class H common stock for shares of
General Motors Common Stock nor (ii) the purchase of shares of General Motors
Common Stock in a manner qualifying for the safe harbor protection of Rule
10b-18 promulgated under the Exchange Act shall require any adjustment to be
made pursuant to this Section 2.01(b).
SECTION 2.02 Subscription for FAH Shares. At the Closing,
upon the terms and subject to the conditions set forth in this Agreement, Fiat
Auto Holdings shall issue to General Motors or one of its Subsidiaries, and
General Motors or one of its Subsidiaries shall subscribe in a tax efficient
manner for, the number of newly issued shares (the "FAH Shares") of Fiat Auto
Holdings Common Stock that represents 20% of the outstanding Fiat Auto Holdings
Common Stock, after giving effect to such issuance. The subscription price for
the FAH Shares shall be $2.4 billion and shall be payable, as further provided
below, to Fiat Auto Holdings either in immediately available funds, or in the
economic equivalent thereof, in a manner which maximizes the financial returns
to General Motors and its Subsidiaries and Fiat and its Subsidiaries and which
will provide Fiat Auto Holdings with access to $2.4 billion in immediately
6
available funds immediately following the Closing (Fiat shall have the right to
review in advance, to the extent practicable, all documentation used by General
Motors to effect the transactions contemplated by this Section 2.02).
SECTION 2.03 Purchase Price and Subscription Price. The
respective prices to be paid by Fiat or one of its Subsidiaries and General
Motors or one of its Subsidiaries for the General Motors Shares and the FAH
Shares pursuant to Sections 2.01 and 2.02 above shall be payable at the Closing
by wire transfer in immediately available funds to the bank accounts specified
in writing by the parties at least two Business Days prior to the Closing,
unless otherwise agreed.
SECTION 2.04 Closing. Assuming all conditions to the
obligations of Fiat and General Motors to consummate the Share Transactions have
been satisfied or waived, the issue of General Motors Shares and FAH Shares
contemplated by this Agreement shall take place at a closing (the "Closing") to
be held at the offices of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ at 10:00 a.m. on the later to occur of (i) May 15, 2000, or (ii) the
third Business Day following the satisfaction of the conditions specified in
Section 7.01(a) and (c) or at such other time, place or date as shall be agreed
upon by the parties to this Agreement. The date upon which the Closing occurs is
referred to herein as the "Closing Date".
SECTION 2.05 Closing Deliveries. (a) At the Closing, Fiat
shall deliver or cause to be delivered to General Motors the following:
(i) a certificate or certificates, registered in the name
of General Motors, or one of its Subsidiaries or such
nominee of General Motors as may be specified by
General Motors two Business Days prior to the Closing
Date, evidencing the FAH Shares being subscribed for
by General Motors or one of its Subsidiaries;
(ii) a receipt for the subscription price paid by General
Motors or one of its Subsidiaries for the FAH Shares;
and
(iii) the other documents, agreements and certificates
required to be delivered by Fiat pursuant to Article
VII.
(b) At the Closing, General Motors shall deliver or cause to be
delivered to Fiat the following:
(i) a certificate or certificates, registered in the name
of Fiat, or one of its Subsidiaries or such nominee
of Fiat as may be specified by Fiat two Business Days
prior to the Closing Date, evidencing the General
Motors Shares being purchased by Fiat or one of its
Subsidiaries;
(ii) a receipt for the purchase price paid by Fiat or one
of its Subsidiaries for the General Motors Shares;
and
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(iii) the other documents, agreements and certificates
required to be delivered by General Motors pursuant
to Article VII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FIAT
Fiat hereby represents and warrants to General Motors that,
except as otherwise disclosed in the Fiat SEC Reports, the FA Financial
Statements or the Disclosure Schedule delivered by Fiat and forming a part of
this Agreement (the "Fiat Disclosure Schedule"):
SECTION 3.01 Organization and Qualification. Fiat has been
duly organized and is validly existing and in good standing under the laws of
the jurisdiction of its incorporation. Fiat has all necessary corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the Transactions. The execution and
delivery of this Agreement by Fiat and the consummation by Fiat of the
Transactions have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of Fiat are necessary to
authorize this Agreement or to consummate such transactions. This Agreement has
been duly authorized and validly executed and delivered by Fiat and constitutes
(assuming due authorization, execution and delivery by General Motors) a legal,
valid and binding obligation of Fiat, enforceable against Fiat in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar Laws affecting the rights of creditors generally and
the availability of equitable remedies.
SECTION 3.02 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Fiat does not, and the
performance of its obligations hereunder with respect to the Share Transactions
by Fiat and its Subsidiaries will not, (i) conflict with or violate any
provision of the constituent documents of Fiat, (ii) assuming that all consents,
approvals, authorizations and other actions described in Section 3.02(b) have
been obtained and all filings and obligations described in Section 3.02(b) have
been made, conflict with or violate any Law applicable to Fiat or by which any
property or asset of Fiat is bound or affected, or (iii) result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation,
except, with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences which would not reasonably
be expected to, individually or in the aggregate, prevent or materially delay
the performance of the Share Transactions by Fiat and its Subsidiaries.
(b) The execution and delivery of this Agreement by Fiat
does not, and the performance of its obligations hereunder with respect to the
Share Transactions by Fiat and its Subsidiaries will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, except (i) for applicable requirements of the Exchange
Act, the Securities Act of 1933, as amended (the "Securities Act"), state
securities or "blue sky" laws ("Blue Sky Laws"), the New York Stock Exchange,
Inc. (the "NYSE"), the pre-merger notification requirements of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or similar antitrust filings or notifications in other jurisdictions and
8
(ii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not reasonably be
expected to prevent or materially delay consummation of the Share Transactions
and would not otherwise have a Material Adverse Effect on FA and its
Subsidiaries, taken as a whole.
(c) No representation or warranty is made herein by Fiat
with respect to the transactions expected to be the subject of the Joint
Venture Agreements (as hereinafter defined), the Credit Cooperative Agreement
(as hereinafter defined) or the transactions contemplated by Sections 8.02 or
8.03 hereof. Any such representation and warranty shall be provided for in the
agreements to be entered into in connection with such transactions.
SECTION 3.03 FA, Fiat Auto Holdings and Fiat Auto. (a) Each
of FA and its Subsidiaries is, and at the Closing each of Fiat Auto Holdings and
Fiat Auto will be, a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has or, in the
case of Fiat Auto Holdings and Fiat Auto will have, the requisite corporate
power and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such power, authority and
governmental approvals would not have a Material Adverse Effect on FA and its
Subsidiaries, taken as a whole.
(b) At the Closing, the consummation of the Share
Transactions will not (i) conflict with or violate any provision of the
constituent documents of Fiat Auto Holdings or any of its Subsidiaries, (ii)
assuming that all consents, approvals, authorizations and other actions
described in Section 3.02(b) have been obtained and all filings and obligations
described in Section 3.02(b) have been made, conflict with or violate any Law
applicable to Fiat Auto Holdings or any of its Subsidiaries, or by which any
property or asset of Fiat Auto Holdings or any of its Subsidiaries is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of any lien or other encumbrance on
any property or asset of Fiat Auto Holdings or any of its Subsidiaries pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, except with respect to
clauses (ii) and (iii) for any such conflicts, violations, breaches, defaults,
or other occurrences which would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on FA and its Subsidiaries,
taken as a whole.
SECTION 3.04 Absence of Litigation. As of the date hereof,
there is no litigation, suit, claim, action, proceeding or investigation pending
or, to the knowledge of Fiat, threatened against Fiat or any of its
Subsidiaries, properties or assets before any Governmental Authority which seeks
to delay or prevent or would result in the material delay of or would prevent
the consummation of the Share Transactions. Neither Fiat nor any Subsidiary,
property or asset of Fiat is subject to any continuing order of, consent decree,
settlement agreement or similar written agreement with, or, to the knowledge of
Fiat, continuing investigation by, any Governmental Authority, or Order of any
Governmental Authority or any arbitrator which would prevent Fiat from
performing the Share Transactions or prevent or materially delay the
consummation of the Share Transactions.
9
SECTION 3.05 SEC Filings. Fiat has filed all forms, reports
and documents required to be filed by it with the United States Securities and
Exchange Commission (the "SEC") from December 31, 1997 to the date of this
Agreement (collectively, the "Fiat SEC Reports"). All such forms, reports and
documents, as well as all forms, reports and documents to be filed by Fiat with
the SEC after the date hereof and prior to the Closing Date, to the extent they
contain disclosure relating to FA, (i) were or will be prepared in accordance
with the requirements of the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations thereunder, (ii) did not at the time they
were filed, or will not at the time they are filed, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading, and (iii) did
not at the time they were filed, or will not at the time they are filed, omit
any document required to be filed as an exhibit thereto.
SECTION 3.06 Financial Statements. The audited consolidated
financial statements (including, in each case, any notes thereto) of Fiat for
the fiscal years ended December 31, 1997 and December 31, 1998, and the
unaudited consolidated financial statements of Fiat and FA for the fiscal year
ended December 31, 1999, copies of which have been made available to General
Motors, and each of the consolidated financial statements to be approved by the
Boards of Fiat, FA, Fiat Auto Holdings or Fiat Auto after the date hereof and
prior to the Closing Date (collectively, the "FA Financial Statements") was or
will be prepared in accordance with the requirements of Italian Legislative
Decree 127/91, as detailed in the Fiat Disclosure Schedule (such requirements
being "Italian Accounting Principles"), applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes thereto) and each
fairly presented in all material respects or will fairly present in all material
respects the consolidated financial position, results of operations and cash
flows of Fiat, Fiat Auto, Fiat Auto Holdings or FA, as the case may be, and its
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein in accordance with Italian Accounting Principles (subject, in
the case of unaudited statements, to normal, recurring year-end adjustments
which were not, and are not expected to be, material). Except as and to the
extent set forth in the FA Financial Statements, FA and its Subsidiaries do not
have any liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise) other than liabilities and obligations which,
individually or in the aggregate, would not have a Material Adverse Effect on FA
and its Subsidiaries, taken as a whole.
SECTION 3.07 Absence of Certain Changes or Events. Since
December 31, 1999, except as disclosed in any Fiat SEC Report or as contemplated
by this Agreement, there has not been (i) any change, event or circumstance
which, when taken individually or together with all other changes, events or
circumstances, has had or would have a Material Adverse Effect on FA and its
Subsidiaries, or Fiat Auto Holdings and its Subsidiaries, as the case may be,
taken as a whole, (ii) any declaration, setting aside or payment of any dividend
or other distribution by FA, Fiat Auto or Fiat Auto Holdings on any outstanding
equity security thereof, (iii) any guarantee, endorsement or other occurrence or
assumption of liability by FA, Fiat Auto or Fiat Auto Holdings for the
obligations of Fiat or any Subsidiary other than Subsidiaries of FA that is not
at arm's-length terms, or (iv) other than as contemplated by this Agreement, any
transaction outside the ordinary course of business, other than transactions
solely among Subsidiaries of FA.
10
SECTION 3.08 FAH Shares. All of the FAH Shares, when issued
and paid for in the manner provided in this Agreement, will be validly issued,
fully paid and nonassessable.
SECTION 3.09 Capitalization of Fiat Auto Holdings.
Immediately prior to the Closing, all of the outstanding shares of Fiat Auto
Holdings Common Stock and all of the outstanding shares of Fiat Auto capital
stock (the "Fiat Auto Common Stock") will be validly issued, fully paid and
nonassessable and owned, directly or indirectly, by Fiat or, in the case of Fiat
Auto, Fiat Auto Holdings, and there will be no options, warrants or other
rights, agreements (including registration rights agreements), arrangements or
commitments of any character relating to the issued or unissued capital stock of
Fiat Auto Holdings or obligating Fiat Auto or Fiat Auto Holdings to issue or
sell any shares of capital stock of, or other equity interests in, Fiat Auto or
Fiat Auto Holdings, except as contemplated by this Agreement. FA owns and at the
Closing Fiat Auto will own, directly or indirectly, the amount of the
outstanding capital stock of each of the Subsidiaries as is reflected in the FA
Financial Statements except for Subsidiaries disposed of for fair market value
in the ordinary course of business and except for any which, individually or in
the aggregate, would not have a Material Adverse Effect on FA and its
Subsidiaries, taken as a whole.
SECTION 3.10 Investment Purpose. Fiat or one of its
Subsidiaries is acquiring the shares of General Motors Common Stock for its own
account solely for the purpose of investment and not with a view to, or for
offer or sale in connection with, any distribution thereof.
SECTION 3.11 Brokers. No broker, finder or investment
banker (other than ▇▇▇▇▇▇▇, Sachs & Co.) is entitled to any brokerage, finder's
or other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Fiat.
SECTION 3.12 Securities Laws. The Share Transactions
contemplated by this Agreement, and/or any other action or undertaking set forth
hereunder, do not constitute a public offering of securities in Italy or the
Netherlands nor is any application notice or exemption required under any
applicable securities laws in Italy.
SECTION 3.13 Assets. FA and its Subsidiaries own, lease,
license or otherwise have the right to use, and at the Closing Fiat Auto
Holdings and its Subsidiaries will own, lease, license or otherwise will have
the right to use, all assets presently used in the automotive operations of Fiat
except for such assets as have been disposed of in the ordinary course of
business or where the failure to own, lease, license or have the right to use
such assets would not have a Material Adverse Effect on FA and its Subsidiaries,
or Fiat Auto Holdings and its Subsidiaries, as the case may be, taken as a
whole.
11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GENERAL MOTORS
General Motors hereby represents and warrants to Fiat that,
except as otherwise disclosed in the General Motors SEC Reports:
SECTION 4.01 Organization and Qualification. General Motors
has been duly organized and is validly existing and in good standing under the
laws of the jurisdiction of its incorporation. General Motors has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the Transactions. The
execution and delivery of this Agreement by General Motors and the consummation
by General Motors of the Transactions have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the part of
General Motors are necessary to authorize this Agreement or to consummate such
transactions. This Agreement has been duly authorized, validly executed and
delivered by General Motors and constitutes (assuming due authorization,
execution and delivery by Fiat) a legal, valid and binding obligation of General
Motors, enforceable against General Motors in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws
affecting the rights of creditors generally and the availability of equitable
remedies.
SECTION 4.02 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by General Motors does not, and
the performance of its obligations hereunder with respect to the Share
Transactions by General Motors and its Subsidiaries will not, (i) conflict with
or violate any provision of the constituent documents of General Motors, (ii)
assuming that all consents, approvals, authorizations and other actions
described in Section 4.02(b) have been obtained and all filings and obligations
described in Section 4.02(b) have been made, conflict with or violate any Law
applicable to General Motors or by which any property or asset of General Motors
is bound or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, except, with respect to
clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults,
or other occurrences which would not reasonably be expected to, individually or
in the aggregate, prevent or materially delay the performance of the Share
Transactions by General Motors and its Subsidiaries.
(b) The execution and delivery of this Agreement by General
Motors does not, and the performance of its obligations hereunder with respect
to the Share Transactions by General Motors and its Subsidiaries will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except (i) for applicable
requirements of the Exchange Act, the Securities Act, Blue Sky Laws, the NYSE,
the pre-merger notification requirements of the HSR Act or similar anti-trust
filings or notifications in other jurisdictions and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not reasonably be expected to prevent or
materially delay consummation of the Share Transactions and would not otherwise
have a Material Adverse Effect on General Motors.
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(c) No representation or warranty is made herein by General
Motors with respect to the transactions expected to be the subject of the Joint
Venture Agreements, the Credit Cooperative Agreement or the transactions
contemplated by Sections 8.02 or 8.03 hereof. Any such representation and
warranty shall be provided for in the agreements to be entered into in
connection with such transactions.
SECTION 4.03 Absence of Litigation. As of the date hereof,
there is no litigation, suit, claim, action, proceeding or investigation pending
or, to the knowledge of General Motors, threatened against, General Motors or
any of its Subsidiaries, properties or assets before any Governmental Authority
which seeks to delay or prevent or would result in the material delay of or
would prevent the consummation of any of the Share Transactions. Neither General
Motors nor any Subsidiary, property or asset of General Motors is subject to any
continuing order of, consent decree, settlement agreement or similar written
agreement with, or, to the knowledge of General Motors, continuing investigation
by, any Governmental Authority, or any Order of any Governmental Authority or
any arbitrator which would prevent General Motors from performing the Share
Transactions under this Agreement or prevent or materially delay the
consummation of any of the Share Transactions.
SECTION 4.04 SEC Filings. General Motors has filed all
forms, reports and documents required to be filed by it with the SEC from
December 31, 1997 to the date of this Agreement (collectively, the "General
Motors SEC Reports"). All such forms, reports and documents, as well as all
forms, reports and documents to be filed by General Motors with the SEC after
the date hereof and prior to the Closing Date, (i) were or will be prepared in
accordance with the requirements of the Securities Act and the Exchange Act, as
the case may be, and the rules and regulations thereunder, (ii) did not at the
time they were filed, or will not at the time they are filed, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading, and (iii)
did not at the time they were filed, or will not at the time they are filed,
omit any document required to be filed as an exhibit thereto.
SECTION 4.05 Financial Statements. Each of the consolidated
financial statements (including, in each case, any notes thereto) of General
Motors contained in the General Motors SEC Reports and each of the consolidated
financial statements of General Motors to be filed by General Motors with the
SEC after the date hereof and prior to the Closing Date was or will be prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presented in all material
respects or will fairly present in all material respects the consolidated
financial position, results of operations and cash flows of General Motors and
its Subsidiaries as at the respective dates thereof and for the respective
periods indicated therein in accordance with United States generally accepted
accounting principles (subject, in the case of unaudited statements, to normal
and recurring year-end adjustments which were not, and are not expected to be,
material). Except as and to the extent set forth in the General Motors SEC
Reports, General Motors and its Subsidiaries do not have any liability or
obligation of any nature (whether accrued, absolute, contingent or otherwise)
13
other than liabilities and obligations which, individually or in the aggregate,
would not have a Material Adverse Effect on General Motors and its Subsidiaries,
taken as a whole.
SECTION 4.06 Absence of Certain Changes or Events. Since
December 31, 1999, except as disclosed in any General Motors SEC Report or as
contemplated by this Agreement, there has not been any change, event or
circumstance which, when taken individually or together with all other changes,
events or circumstances, has had or would have a Material Adverse Effect on
General Motors and its Subsidiaries, taken as a whole.
SECTION 4.07 Investment Purpose. General Motors or one of
its Subsidiaries is acquiring the FAH Shares for its own account solely for the
purpose of investment and not with a view to, or for offer or sale in connection
with, any distribution thereof.
SECTION 4.08 General Motors Common Stock. All of the
General Motors Shares, when issued and paid for as provided in this Agreement,
will be validly issued, fully paid and nonassessable.
SECTION 4.09 Brokers. No broker, finder or investment
banker (other ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.) is entitled to any brokerage,
finder's or other fee or commission in connection with the Transactions based
upon arrangements made by or on behalf of General Motors.
SECTION 4.10 Securities Laws. The Share Transactions
contemplated by this Agreement, and/or any other action or undertaking set forth
hereunder, do not constitute a public offering of securities in Italy or the
Netherlands nor is any application notice or exemption required under any
applicable securities laws in Italy.
ARTICLE V
JOINT VENTURES AND COOPERATION
SECTION 5.01 Powertrain Joint Venture. Fiat and General
Motors, or Subsidiaries thereof, shall establish a joint venture for the design
and manufacture of motor vehicle powertrains and related components for
incorporation into Fiat Auto's and General Motors' motor vehicles and other
original equipment manufacturers within the geographic territory specified in
Exhibit 5.01 (the "Powertrain JV"). The Powertrain JV shall be established
pursuant to a definitive joint venture agreement (the "Powertrain JV Agreement")
to be entered into between Fiat Auto and General Motors, or Subsidiaries
thereof, which shall contain the terms and conditions described in Exhibit 5.01
and such other terms and conditions as may be agreed to by the parties. The
parties shall negotiate, execute and deliver the Powertrain JV Agreement as soon
as reasonably practicable but no later than the later of (i) four months after
the date hereof or (ii) the Closing Date, and shall cause the Powertrain JV
pursuant to such agreement to become fully operational within one year after the
Closing Date.
SECTION 5.02 Purchasing Joint Venture. Fiat and General
Motors, or Subsidiaries thereof, shall establish a joint venture for the
purchase of parts and supplies for automobile manufacturing within the
geographic territory specified in Exhibit 5.02 (the "Purchasing JV" and,
14
together with the Powertrain JV, the "Joint Ventures"). The Purchasing JV shall
be established pursuant to a definitive joint venture agreement (the "Purchasing
JV Agreement" and, together with the Powertrain JV Agreement, the "Joint Venture
Agreements") to be entered into between Fiat Auto Holdings and General Motors,
or Subsidiaries thereof, which shall contain the terms and conditions described
in Exhibit 5.02 and such other terms and conditions as may be agreed to by the
parties. The parties shall negotiate, execute and deliver the Purchasing JV
Agreement as soon as reasonably practicable but no later than the later of (i)
four months after the date hereof or (ii) the Closing Date, and shall cause the
Purchasing JV pursuant to such agreement to become fully operational within one
year after the Closing Date.
SECTION 5.03 Credit Cooperative Agreement. Fiat and General
Motors, or Subsidiaries thereof, shall establish a cooperative arrangement for
combining the back-office activities of their respective automobile credit
operations (the "Credit Cooperative"). The Credit Cooperative shall be
established pursuant to a definitive agreement (the "Credit Cooperative
Agreement") to be entered into between Fiat Auto Holdings and General Motors, or
Subsidiaries thereof, which shall contain the terms and conditions described in
Exhibit 5.03 (such Exhibit, together with Exhibits 5.01 and 5.02, being
collectively referred to as the "JV Term Sheets") and such other terms and
conditions as may be agreed upon by the parties.
SECTION 5.04 Cooperation. (a) In addition to the formation
of the Joint Ventures and the Credit Cooperative, the parties shall establish a
committee to analyze the development of common platforms in order to reduce
investments and research and development expenses and to maximize the number of
common components employed in Fiat Auto's and General Motors' respective
automobiles. Fiat and General Motors shall implement these analyses through the
creation of teams operating in the product planning area comprised of equal
numbers of representatives from each of Fiat Auto and General Motors.
(b) Fiat and General Motors will cooperate in analyzing the
feasibility of importing Fiat products, in particular its "Alfa Romeo" brand of
automobiles, into the United States with the support of the General Motors
distribution network.
(c) Fiat and General Motors will cooperate in specific
research and development programs, including, without limitation, their
respective research and development centers for programs for engine emissions,
new materials and safety components, as may be agreed upon by Fiat and General
Motors from time to time.
(d) The Fiat shared services companies listed on Exhibit
5.04(d) (the "Shared Services Companies") and Fiat Auto and their respective
Subsidiaries have executed or will execute long-term services agreements
pursuant to which the Shared Services Companies shall continue to serve Fiat
Auto on an arm's length basis. In addition, Fiat shall cause each of the Shared
Services Companies to be available to serve the Joint Ventures and the General
Motors' operations on an arm's length basis in their respective Territories (as
defined in their respective JV Term Sheets). Any change in the services provided
by the Shared Services Companies to the Joint Ventures that is not consistent
with past practice must be approved by the Steering Committee.
15
(e) For at least five years after the commencement of the
Purchasing JV, the parties shall cause the Purchasing JV to execute supply
agreements on an arm's length and competitive basis with each of Magneti
Marelli, Teksid, Comau, Comau Service and their respective Subsidiaries pursuant
to which agreements such companies shall continue to serve Fiat Auto.
(f) Fiat and General Motors will further use their good
faith efforts to maximize the synergies of the Joint Ventures and the Credit
Cooperative, including, without limitation, by means of a progressive expansion
of the Joint Ventures' and the Credit Cooperative's operations.
SECTION 5.05 Steering Committee. (a) Fiat and General
Motors shall immediately after the date hereof establish a Steering Committee
(the "Steering Committee"), which shall be comprised of three members appointed
by each party. Unless otherwise agreed to by the parties, the three members
appointed to the Steering Committee by General Motors shall be the General
Motors Worldwide President, the General Motors European operations President,
the General Motors Latin America operations President and the three members to
the Steering Committee appointed by Fiat shall be the Fiat CEO, the Fiat Auto
Worldwide CEO, and the Fiat Auto Latin America CEO.
(b) The Steering Committee shall have full power and
responsibility for the supervision and governance of the Joint Ventures and the
Credit Cooperative and the cooperation contemplated by Section 5.04 hereof. The
Steering Committee shall focus exclusively on cooperation, development and
achievement of synergies and the operation of the Joint Ventures and the Credit
Cooperative, and shall be responsible for (i) general oversight of the
consummation of the Transactions, including, without limitation, implementation
of this Agreement and the formation of the Joint Ventures and the Credit
Cooperative, (ii) oversight of the management of the Joint Venture Businesses
and the identification and implementation of any synergies in such businesses,
(iii) the achievement of appropriate levels of synergies, (iv) review and
approval of annual business plans for each of the Joint Ventures and the Credit
Cooperative and (v) compliance with applicable Law, including antitrust and
competition Laws.
(c) The Steering Committee shall meet as frequently as the
parties deem necessary, but at least four times per year. The selection of the
time and place of the first meeting shall be made by Fiat and shall alternate
between the parties for each meeting thereafter, in each case subject to the
consent of the other party, which shall not be unreasonably withheld or delayed.
By the unanimous consent of its members, the Steering Committee may change the
location and frequency of such meetings. The members of the Steering Committee
appointed by one party may call a special meeting of the Steering Committee at
least twice per year upon providing reasonable notice to the other party.
(d) In order to efficiently implement the provisions
contained in this Article V, the parties shall identify suitable forms of
collaboration, including, but not limited to, consortia, coordination centers,
Groupement Europ-en d'Inter-t Economique ("GEIEs") or such other legal entity or
branch structures which are the most tax efficient to both parties and which
allow the proper functioning of the Steering Committee as a governance board of
the Joint Ventures and the Credit Cooperative.
16
(e) Fiat Auto Holdings shall establish an appropriate
organizational structure and designate appropriate staff members to provide
support to the Steering Committee.
(f) The Steering Committee shall perform all
responsibilities set forth in this Section 5.05 in a manner which represents and
is consistent with the principle of the independence and continued competitive
relationship of Fiat and General Motors.
SECTION 5.06 General Provisions. (a) Term. Each Joint
Venture shall have an initial term of 10 years, renewable automatically at the
end thereof for successive 10-year terms, unless otherwise terminated pursuant
to the relevant Joint Venture Agreement.
(b) Termination. In the event that a direct or indirect
Change of Control of Fiat, Fiat Auto Holdings or Fiat Auto occurs, the parties
shall meet in good faith to determine whether (i) the benefits of the Joint
Ventures and the Credit Cooperative may be preserved for the respective joint
venturers, and (ii) the benefits of the Joint Ventures and the Credit
Cooperative can be made available to the acquiror in such Change of Control,
including, without limitation, the benefits of any synergies resulting from the
inclusion of the acquiror's businesses in the Joint Ventures and the Credit
Cooperative, in addition to the existing synergies resulting from the businesses
of Fiat Auto and General Motors without adverse affect on General Motors or Fiat
Auto from such Change of Control. In the absence of such a mutual determination,
not later than 12 months from the date of such Change of Control, either party
may terminate any or all of the Joint Ventures and the Credit Cooperative. In
such event, any Joint Venture or Credit Cooperative to be terminated shall be
wound up.
(c) Wind-up. Any winding up of a Joint Venture or the
Credit Cooperative shall be done on an orderly, commercially viable basis that
minimizes the prejudice to the parties and shares that prejudice which cannot be
avoided in an equitable manner. It is the current view of the parties that (i)
the Purchasing Joint Venture would best be unwound by splitting its operations
between the parties and (ii) the Powertrain Joint Venture would best be unwound
by either separating the Powertrain JV from General Motors and Fiat Auto
Holdings as an independent company and supplier of both parties, or having one
party purchase the Powertrain JV from the other at fair market value through a
buy-sell mechanism to be established in the Powertrain JV Agreement with the
selling party having the benefit of a long term supply contract.
(d) Synergies. With respect to profit and loss: (i) the
Purchasing JV will operate such that, for each fiscal year, it will not have any
profit and loss and all synergies achieved by it will be passed through to Fiat
Auto and General Motors in the form of lower prices and (ii) the Powertrain JV
will operate such that, for each fiscal year, it will not have any profit and
loss and all synergies achieved by it will be passed through to Fiat Auto and
General Motors; provided, however, that, under certain exceptional circumstances
to be set forth in the Powertrain JV Agreement, the Powertrain JV may have
profit and loss.
(e) Subsidies. The parties shall jointly identify and shall
agree upon the most efficient and profitable manner (for both the Joint
Ventures, the Credit Cooperative and the parties) to make available to the Joint
Ventures and the Credit Cooperative the assets owned by each of them without
17
infringement of any applicable law or obligation relating to public aids and
subsidies received or to be received in connection with such assets.
(f) Equalization Payments. In the event that the net value
of the assets contributed to a Joint Venture are not equal, equalization
payments will be made or other arrangements to provide compensation will be
mutually agreed upon by the parties.
(g) Interpretation. Any conflict between the provisions of
the JV Term Sheets and the provisions of Article V of this Agreement shall be
resolved in favor of the provisions of this Agreement.
ARTICLE VI
COVENANTS
SECTION 6.01 Restrictive Legend. Each certificate
representing the General Motors Shares shall, except as otherwise provided in
this Article VI, be stamped or otherwise imprinted with a legend substantially
in the following form:
THE OFFER AND SALE OF THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND THIS SECURITY MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER HAS BEEN REGISTERED UNDER
THE ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
A certificate shall not be required to bear the foregoing legend and any
certificate bearing such legend may be exchanged for a certificate which bears
no legend, if in the opinion of counsel satisfactory to General Motors the
securities represented thereby may be publicly sold without registration under
the Securities Act.
SECTION 6.02 Access to Information. (a) From and after the
date hereof, to the extent permitted by applicable Law, including applicable
antitrust and competition Laws, any confidentiality or similar agreement or
arrangement to which Fiat or any of its Subsidiaries is a party, or the
requirements of any stock exchange or other regulatory organization with whose
rules Fiat is required to comply, Fiat will provide to General Motors and its
representatives access to all information and documents which General Motors may
reasonably request relating to the businesses of Fiat Auto to be contributed to
the Joint Ventures or which will participate in the Credit Cooperative which is
necessary to negotiate the Joint Venture Agreements and the Credit Cooperative
Agreement.
(b) From and after the date hereof, to the extent permitted
by applicable Law, including applicable antitrust and competition Laws, any
confidentiality or similar agreement or arrangement to which General Motors or
any of its Subsidiaries is a party, or the requirements of any stock exchange or
other regulatory organization with whose rules General Motors is required to
comply, General Motors will provide to Fiat and its representatives access to
all information and documents which Fiat may reasonably request relating to the
businesses of General Motors to be contributed to the Joint Ventures which is
18
necessary to negotiate the Joint Venture Agreements and the Credit Cooperative
Agreement.
(c) No investigation pursuant to this Section 6.02 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto.
SECTION 6.03 Conduct of Joint Venture Businesses. Each of
Fiat and General Motors covenant and agree that, between the date of this
Agreement and the date of establishment of each of the Joint Ventures and the
Credit Cooperative, except as contemplated by this Agreement or Section 6.03 of
the Disclosure Schedule or as the other party shall otherwise agree in advance
in writing, which agreement shall not be unreasonably withheld or delayed, it
shall conduct those of its businesses which are to become a part of the Joint
Venture Businesses only in the ordinary course of business and in compliance
with applicable Laws, including the antitrust and competition Laws, and in a
manner consistent with past practice, and each party shall use its reasonable
best efforts to preserve substantially intact those of its businesses which are
to become a part of the Joint Venture Businesses, to keep available the services
of the current officers, employees and consultants of such businesses and to
preserve the current relationships of such party with customers, distributors,
dealers, suppliers and other persons with which such businesses have significant
business relations.
SECTION 6.04 Formation of Fiat Auto Holdings and Fiat Auto.
(a) Prior to the Closing:
(i) Fiat shall restructure its ownership of FA's
businesses in the manner described in Exhibit 6.04;
(ii) except as contemplated by this Agreement, neither FA,
Fiat Auto nor Fiat Auto Holdings shall issue any
shares of capital stock, or securities convertible
into capital stock; and
(iii) Fiat may otherwise restructure the ownership of its
Subsidiaries (other than Fiat Auto Holdings or Fiat
Auto) so long as such restructuring shall not have an
adverse effect on General Motors.
(b) General Motors shall have the right to review in
advance, to the extent practicable, all documentation used to effect the
transactions contemplated by this Section 6.04.
SECTION 6.05 Appropriate Action; Consents; Filings. (a)
Each of the parties hereto shall make promptly its respective filings, and
thereafter make any other required submissions, under the HSR Act with respect
to the Transactions. In addition, the parties shall notify this Agreement to the
European Community Commission and request a negative clearance or an exemption
under Article 81 of the Treaty of Rome. The parties hereto will use their
respective best efforts to consummate and make effective the Transactions and to
cause the conditions to the Transactions set forth in Article VII to be
satisfied (including using best efforts to obtain all licenses, permits,
consents, approvals, authorizations, waivers, qualifications and orders of
19
Governmental Authorities as are necessary for the consummation of the
Transactions). Fiat and General Motors each agree to use their best efforts to
avoid or eliminate any impediment and obtain all consents or waivers under any
antitrust or competition Law that may be asserted by any antitrust or
competition Governmental Authority, so as to enable the parties to close the
Transactions. In addition, each of Fiat and General Motors agree to use their
best efforts to obtain any consent or to vacate or lift any Order relating to
antitrust or competition Law matters that would have the effect of making any of
the Transactions illegal or otherwise prohibiting or materially delaying their
consummation. In the event a Governmental Authority with applicable jurisdiction
imposes any limitations on this Agreement or the Joint Venture Agreements or the
Credit Cooperative Agreement, the parties will implement those limitations to
the extent necessary to comply with the requirements of such Governmental
Authority, subject to the provisions of Section 8.02(c) hereof with respect to
the sale of the Offered Shares; provided, however, that to the extent that any
such limitation shall have a material adverse effect on the synergy value of any
particular Joint Venture or the Credit Cooperative proposed to be established
under this Agreement, either party may elect to cease implementation of such
Joint Venture or the Credit Cooperative without otherwise affecting the overall
validity of the Cooperative Arrangement, the terms and conditions of this
Agreement, the other continuing Joint Venture Agreements or, if continuing, the
Credit Cooperative Agreement. In addition to the foregoing, in the event Fiat
delivers a Put Notice pursuant to Section 8.03 hereof, General Motors shall
commit to effect the sale or disposition of such of its assets or businesses as
are required to be divested in order to avoid the entry of, or to effect the
dissolution of, any Order that would otherwise have the effect of preventing or
materially delaying the consummation of the Put Closing; provided that General
Motors shall not be required to agree to divest assets or operations of General
Motors or Fiat Auto which are required to be divested by a Governmental
Authority as a condition to obtaining necessary approvals under applicable
antitrust and competition laws, or to effect the dissolution of any such Order,
if (A) such assets or operations constitute all or substantially all the assets
or operations of (i) General Motors located in Europe, (ii) General Motors
located in Latin America, or (iii) Fiat Auto (unless, in any such case, the
divestiture requirement is reasonably regarded to arise out of, or be
principally due to, one or more acquisitions consummated by General Motors after
the Closing Date) or (B) the divestiture requirement is reasonably regarded to
arise out of or be principally due to one or more acquisitions consummated by
Fiat after the Closing Date.
(b) Each of Fiat and General Motors shall give (or shall
cause its respective Subsidiaries to give) any notices to third parties, and
Fiat and General Motors shall use, and cause each of its Subsidiaries to use,
its commercially reasonable efforts to obtain any third party consents,
necessary, proper or advisable to consummate the Transactions. Each of the
parties hereto will furnish to the other such necessary information and
reasonable assistance as the other may request in connection with the
preparation of any required governmental filings or submissions and will
cooperate in responding to any inquiry from a Governmental Authority, including
immediately informing the other parties of such inquiry, consulting in advance
before making any presentations or submissions to a Governmental Authority, and
supplying each other with copies of all material correspondence, filings or
communications between any party and any Governmental Authority with respect to
this Agreement.
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SECTION 6.06 Notification of Certain Matters. Fiat shall
give prompt notice to General Motors, and General Motors shall give prompt
notice to Fiat, of (a) the occurrence, or nonoccurrence, of any event the
occurrence, or nonoccurrence, of which would be likely to cause (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (ii) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied in any material
respect and (b) any failure of Fiat or General Motors, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 6.06 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
SECTION 6.07 Public Announcements. Fiat and General Motors
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement and shall not issue
any such press release or make any such public statement without the prior
consent of the other (which consent shall not be unreasonably withheld or
delayed), except as may be required by Law or the rules of any stock exchange on
which the securities of Fiat or General Motors, as the case may be, are listed.
SECTION 6.08 Standstill. Each of Fiat and General Motors
agrees that from and after the date of this Agreement, for so long as each of
them owns, directly or indirectly, any shares of Fiat Auto Holdings Common Stock
and for a period of ten years thereafter, it will not and it will cause its
Subsidiaries not to, without the prior written consent of the other party:
(a) acquire, offer to acquire, or agree to
acquire, directly or indirectly, by purchase or otherwise, any voting
securities or direct or indirect rights to acquire any voting
securities of the other party or any Subsidiary thereof, or of any
successor to or person in control of the other party, or any assets
of the other party or any Subsidiary or division thereof or of any
such successor or controlling person;
(b) make or in any way participate, directly or
indirectly, in any "solicitation" of "proxies" to vote (as such terms
are used in the rules of the SEC), or seek to advise or influence any
person or entity with respect to the voting of any voting securities
of the other party;
(c) make any public announcement with respect to,
or submit a proposal for or offer of (with or without conditions),
any extraordinary transaction involving the other party or any of its
securities or assets;
(d) form, join or in any way participate in a
"group" as defined in Regulation 13D-G under the Exchange Act, in
connection with any of the foregoing; or
(e) request the other party, directly or
indirectly, to amend or waive any provision of this paragraph.
The foregoing standstill provisions in this Section 6.08 shall not apply to any
acquisition, voting, public announcement or proposal with respect to the voting
securities or assets of Fiat Auto Holdings or any Subsidiary thereof, or any
participation in any "group" (within the meaning of Regulation 13D-G under the
21
Exchange Act) in connection therewith, or any request to amend or waive this
sentence after the securities of such entity are listed on a securities exchange
or otherwise publicly quoted for trading. Notwithstanding the foregoing, in the
event that upon the sale of Fiat Auto Holdings Common Stock or Fiat Auto Common
Stock to General Motors pursuant to Section 8.02 or 8.03 Fiat requests payment
of the purchase price in shares of General Motors Common Stock but receives all
or a portion of the purchase price in cash, Fiat may use such cash to acquire
additional shares of General Motors Common Stock; provided, however, that after
giving effect to any such acquisition, Fiat and its Subsidiaries shall not
beneficially own (within the meaning of Regulation 13D-G under the Exchange Act)
more than 10% of the outstanding shares of General Motors Common Stock.
SECTION 6.09 Confidentiality. Each of the parties has
disclosed and delivered and will disclose and deliver to the other information
about its properties, employees, finances, businesses and operations (such party
when disclosing such information being the "Disclosing Party" and such party
when receiving such information being the "Receiving Party"). All such
information furnished by a Disclosing Party or its Representatives (as defined
below), whether furnished before or after the date hereof, whether oral or
written, and regardless of the manner in which it is furnished, is referred to
in this Agreement as "Proprietary Information." Proprietary Information does not
include, however, information which (a) is or becomes generally available to the
public other than as a result of a disclosure by the Receiving Party or its
Representatives, (b) was available to the Receiving Party on a nonconfidential
basis prior to its disclosure by the Disclosing Party or its Representatives or
(c) becomes available to the Receiving Party on a nonconfidential basis from a
person other than the Disclosing Party or its Representatives who is not
otherwise bound by a confidentiality agreement with the Disclosing Party or any
of its Representatives, or is otherwise not under an obligation to the
Disclosing Party or any of its Representatives not to transmit the information
to the Receiving Party. As used in this Agreement, the term "Representative"
means, as to any person, such person's affiliates and its and their directors,
officers, employees, agents, advisors (including, without limitation, financial
advisors, counsel and accountants) and Controlling Persons.
(i) Subject to clause (ii) below, unless
otherwise agreed to in writing by the Disclosing Party, the Receiving
Party agrees (a) except as required by applicable law or regulation
or stock exchange rule or by legal process, to keep all Proprietary
Information confidential and not to disclose or reveal any
Proprietary Information to any Person other than its Representatives
who are actively and directly participating in the consummation of
the Transactions or who otherwise need to know the Proprietary
Information in connection with the Transactions and to cause those
Persons to observe the terms of this Agreement and (b) not to use
Proprietary Information for any purpose other than in connection with
the Transactions. The Receiving Party will be responsible for any
breach of the terms of this Section 6.09 by the Receiving Party or
any of its Representatives.
(ii) In the event that the Receiving Party is
requested pursuant to, or required by, applicable law or regulation
or stock exchange rule or by legal process to disclose any
Proprietary Information or any other information concerning the
Disclosing Party, the Receiving Party agrees that it will provide the
Disclosing Party with prompt notice of such request or requirement in
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order to enable the Disclosing Party to seek an appropriate
protective order or other remedy, to consult with the Receiving Party
with respect to the Disclosing Party taking steps to resist or narrow
the scope of such request or legal process, or to waive compliance,
in whole or in part, with the terms of this Section 6.09. In the
event that no such protective order or other remedy is obtained or
that the Disclosing Party waives compliance with the terms of this
Section 6.09, the Receiving Party will furnish only that portion of
any Proprietary Information which the Receiving Party is advised by
counsel is legally required and will exercise all reasonable efforts
to obtain reliable assurance that confidential treatment will be
accorded any Proprietary Information.
(iii) If this Agreement is terminated, each party
will promptly return to the other party all copies of Proprietary
Information in its possession or in the possession of any of its
Representatives and will not retain any copies or other reproductions
in whole or in part of such material. All other documents, memoranda,
notes, summaries, analyses, extracts, compilations, studies or other
material whatsoever prepared by it or any of its Representatives
based on the Proprietary Information will be destroyed, and such
destruction will be certified in writing to the other party by an
authorized officer supervising such destruction. Any oral Proprietary
Information will continue to be the subject of this Section 6.09.
(iv) Without prejudice to the rights and remedies
otherwise available to each of the parties hereto, each such party
shall be entitled to equitable relief by way of injunction or
otherwise if the other party or any of its Representatives breaches
or threatens to breach any of the provisions of this Section 6.09.
SECTION 6.10 Certain Rights of the Parties. (a) Except as
otherwise permitted pursuant to Article VIII, from and after the Closing, for so
long as General Motors or a Subsidiary thereof owns shares of Fiat Auto Holdings
Common Stock, Fiat shall cause Fiat Auto Holdings not to (i) sell, lease,
transfer or otherwise dispose of (including by merger, dividend or other
distribution, formation of a joint venture or otherwise) Fiat Auto or all or
substantially all of the assets of Fiat Auto Holdings or Fiat Auto. For purposes
hereof, "substantially all of the assets of Fiat Auto Holdings or Fiat Auto"
shall mean assets having a fair market value or earnings power constituting a
majority or more of the assets or earnings power of Fiat Auto Holdings and its
Subsidiaries on a consolidated basis.
(b) Except as otherwise contemplated by this Agreement,
from and after the Closing, Fiat will cause FA, Fiat Auto Holdings and Fiat Auto
not to take any of the following actions without the prior written consent of
General Motors:
(i) enter into, commence or engage in any
business that is unrelated to the production, distribution and sale
of motor vehicles, automobiles and automotive parts and connected
services;
(ii) with respect to Fiat Auto Holdings, redeem,
purchase or otherwise acquire for cash, any shares of its capital
stock or any securities convertible into or exchangeable for shares
23
of its capital stock, if such redemption, purchase or acquisition is
not made on a pro rata basis for all shareholders;
(iii) dissolve, liquidate or wind up its
business and affairs;
(iv) enter into any transaction with any of
Fiat's Affiliates, except on an arm's length basis; or
(v) issue any shares of capital stock, or any
securities convertible into or exchangeable for shares of capital
stock, whether for cash or in exchange for capital stock, or any
securities convertible into or exchangeable for shares of capital
stock, of any other Person, except for issuances subject to
preemptive rights.
(c) For so long as General Motors or a Subsidiary thereof
owns shares of Fiat Auto Holdings Common Stock, Fiat shall cause Fiat Auto to
notify General Motors in advance of any sale, lease, transfer or other
disposition (including by merger, dividend or other distribution, formation of a
joint venture or otherwise), in a single transaction or a series of related
transactions, of (i) its business in any country in which it derives 10% or more
of its revenues, (ii) any brand or product line, or (iii) any plants or vehicle
platforms that are material to Fiat Auto's automotive operations, and shall give
General Motors a 60-day exclusive period in which to negotiate with Fiat in good
faith to acquire such assets.
(d) For so long as General Motors or a Subsidiary thereof
owns shares of Fiat Auto Holdings Common Stock, Fiat shall cause Fiat Auto
Holdings to provide to General Motors the following information:
(i) within 90 days after the close of each fiscal
year of Fiat Auto Holdings, audited consolidated financial statements
of Fiat Auto Holdings for such fiscal year,
(ii) within 45 days after the end of each fiscal
quarter of Fiat Auto Holdings, unaudited consolidated financial
statements of Fiat Auto Holdings for such quarter, and
(iii) any documentation that General Motors may
reasonably request from Fiat Auto Holdings for purposes of complying
with applicable tax reporting requirements and its financial
reporting requirements under applicable laws and the rules of
relevant stock exchanges.
(e) For so long as Fiat or a Subsidiary thereof
beneficially owns shares of General Motors Common Stock, General Motors shall
provide to Fiat the following information:
(i) within 90 days after the close of each fiscal
year of General Motors, audited consolidated financial statements of
General Motors for such fiscal year,
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(ii) within 45 days after the end of each fiscal
quarter of General Motors, unaudited consolidated financial
statements of General Motors for such quarter, and
(iii) any documentation that Fiat may reasonably
request from General Motors for purposes of complying with applicable
tax reporting requirements and its financial reporting requirements
under applicable laws and the rules of related stock exchanges.
(f) In the event General Motors restructures any of its
Subsidiaries, General Motors shall be responsible for all fees and costs
(including all taxes and tax liabilities) associated therewith.
(g) For so long as General Motors or a Subsidiary thereof
beneficially owns shares of Fiat Auto Holdings Common Stock, Fiat shall also
review with General Motors, on a periodic basis, the expected cash management
and dividend policy of Fiat Auto Holdings.
(h) For so long as the Joint Ventures, or the Cooperative
Agreement, continue, each party will give reasonable consideration to requests
for information from the other party relating to its automobile business;
provided, that such information is not competitively sensitive and that there is
no obligation on the part of either party to provide the requested information.
ARTICLE VII
CONDITIONS TO THE CLOSING
SECTION 7.01 Conditions to the Obligations of Each Party.
The obligations of Fiat and General Motors to consummate the Share Transactions
are subject to the satisfaction or waiver of the following conditions:
(a) any applicable waiting period under the HSR
Act relating to the Share Transactions shall have expired or been
terminated;
(b) no Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law, rule, regulation,
executive order or Order which is then in effect and has the effect
of making a Share Transaction illegal or otherwise prohibiting
consummation of a Share Transaction; and
(c) Fiat Auto Holdings and Fiat Auto shall have
been created and the related restructuring contemplated by Section
6.04 hereof shall have been completed.
SECTION 7.02 Conditions to the Obligations of Fiat. The
obligations of Fiat to consummate the Share Transactions are subject to the
satisfaction or waiver of the following further conditions:
(a) each of the representations and warranties of
General Motors contained in this Agreement shall be true and correct
as of the Closing Date as though made on and as of the Closing Date
25
(except to the extent expressly made as of an earlier date, in which
case as of such date), except where the failure to be so true and
correct would not have, individually or in the aggregate, a Material
Adverse Effect on General Motors and its Subsidiaries, taken as a
whole, and Fiat shall have received a certificate of an officer of
General Motors to such effect;
(b) General Motors shall have performed or
complied in all material respects with all material agreements and
covenants required by this Agreement to be performed or complied with
by it on or prior to the Closing Date, and Fiat shall have received a
certificate of an officer of General Motors to such effect;
(c) General Motors shall have entered into a
registration rights agreement with Fiat providing Fiat with
registration rights for its General Motors Shares on customary terms
and conditions; and
(d) all other consents, approvals, authorizations
or permits required to be obtained by Fiat or General Motors in order
to consummate the Share Transactions, and all other filings or
notifications required to be made by Fiat or General Motors in order
to consummate the Share Transactions, have been obtained or made by
Fiat or General Motors, as the case may be, except where (i) the
failure to obtain such consents, approvals, authorizations or permits
or (ii) the failure to make such filings or notifications, as the
case may be, shall not have, individually or in the aggregate, a
Material Adverse Effect on Fiat and its Subsidiaries, taken as a
whole.
SECTION 7.03 Conditions to the Obligations of General
Motors. The obligations of General Motors to consummate the Share Transactions
are subject to the satisfaction or waiver of the following further conditions:
(a) each of the representations and warranties of
Fiat contained in this Agreement shall be true and correct as of the
Closing Date as though made on and as of the Closing Date (except to
the extent expressly made as of an earlier date, in which case as of
such date), except where failure to be so true and correct would not
have, individually or in the aggregate, a Material Adverse Effect on
Fiat Auto Holdings and its Subsidiaries, taken as a whole, and
General Motors shall have received a certificate of an officer of
Fiat to such effect;
(b) Fiat shall have performed or complied in all
material respects with all material agreements and covenants required
by this Agreement to be performed or complied with by it on or prior
to the Closing Date, and General Motors shall have received a
certificate of an officer of Fiat to such effect; and
(c) all other consents, approvals, authorizations
or permits required to be obtained by Fiat or General Motors in order
to consummate the Share Transactions, and all other filings or
notifications required to be made by Fiat or General Motors in order
to consummate the Share Transactions, have been obtained or made by
Fiat or General Motors, as the case may be, except where (i) the
failure to obtain such consents, approvals, authorizations or permits
or (ii) the failure to make such filings or notifications, as the
26
case may be, shall not have, individually or in the aggregate, a
Material Adverse Effect on General Motors and its Subsidiaries, taken
as a whole.
ARTICLE VIII
TRANSFERS OF FIAT AUTO HOLDINGS SHARES
SECTION 8.01 Transfer of Shares. Neither Fiat nor General
Motors will dispose of any shares of Fiat Auto Holdings Common Stock and Fiat
will not dispose of any shares of capital stock of FA and will cause Fiat Auto
Holdings not to dispose of any Fiat Auto Common Stock except to a Permitted
Transferee or as otherwise provided in this Article VIII. In connection with any
transfer to a Permitted Transferee, the transferee will execute and deliver to
the non-transferring party the transferee's agreement to be bound by this
Agreement. No such transfer shall release the transferring party from any of its
obligations hereunder. In the event that any Permitted Transferee is to cease
being a Subsidiary of the transferring party, the transferee shall re-transfer
the shares transferred to it back to the transferring party.
SECTION 8.02 Right of First Offer. (a) If Fiat, at any time
after the first anniversary of the Closing Date and prior to the ninth
anniversary thereof (the "ROFO Period"), proposes to sell all and not less than
all of its shares of Fiat Auto Holdings Common Stock (the "Offered Shares"; or
if (x) Fiat Auto Holdings proposes to sell all of the outstanding shares of Fiat
Auto Common Stock, in which case such shares shall be deemed to be the Offered
Shares and references to Fiat in this Section 8.02 shall be deemed to be
references to Fiat Auto Holdings or (y) FA proposes to sell all of the
outstanding shares of Fiat Auto Holdings Common Stock, in which case such shares
shall be deemed to be the Offered Shares and references to Fiat in this Section
8.02 shall be deemed to be references to FA), Fiat shall first comply with the
provisions of this Section 8.02. Fiat shall deliver to General Motors written
notice of its intention to sell the Offered Shares specifying whether it
proposes to sell shares of Fiat Auto Holdings Common Stock or Fiat Common Stock,
the proposed sale price and the other material terms and conditions of such sale
(the "Sale Notice"). At any time within twenty Business Days from the date of
the delivery of the Sale Notice (the "Offer Period"), General Motors may notify
Fiat of its intention either (i) to accept the offer contained in the Sale
Notice (the "Acceptance Notice"), in which case the parties shall proceed as
specified in paragraph (b) below, or (ii) to offer to purchase the Offered
Shares (the "Initial Notice") at a price less than that specified or upon
different terms and conditions than those proposed in the Sale Notice. Upon
receipt of the Initial Notice, Fiat and General Motors shall, for a period of
ten Business Days (the "Price Negotiation Period"), negotiate exclusively with
each other, in good faith, in order to agree on a price for the Offered Shares
and the other material terms and conditions of sale. At any time prior to the
termination of the Price Negotiation Period, General Motors may deliver a
written offer to Fiat (the "Offer Notice"), which notice shall state that it
constitutes the "Offer Notice" delivered pursuant to this Section 8.02(a) and
shall state General Motors' proposed price in cash, or in shares of General
Motors Common Stock, or both, for the Offered Shares and the other material
terms and conditions of such offer. Fiat shall have ten Business Days from the
receipt of the Offer Notice to either accept or reject the terms of the proposed
offer.
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(b) If General Motors delivers the Acceptance Notice or
Fiat accepts General Motors' offer to purchase contained in the Initial Notice
or Offer Notice, the parties shall negotiate definitive documentation (the "ROFO
Purchase Agreement") and close the sale of the Offered Shares as promptly as
practicable, at the proposed price in cash, or in shares of General Motors
Common Stock, or a combination thereof, and the other material terms and
conditions contained in the relevant notice, or such other terms and conditions
as the parties may mutually agree. At or before such closing, the parties shall
execute such documents and cooperate in obtaining such consents and making such
filings that may be reasonably necessary to effect such closing and to transfer
unencumbered and good title to the Offered Shares.
(c) In the event General Motors would be required to make a
divestiture of assets or operations of General Motors or Fiat Auto in order to
obtain necessary approvals under applicable antitrust and competition laws or to
vacate or lift any Order in order to acquire the Offered Shares pursuant to the
ROFO Purchase Agreement, General Motors shall effect such divestiture unless (i)
such divestiture requirement could reasonably be expected to have a material
adverse impact on the combined operations of either General Motors located in
Europe and Fiat Auto located in Europe or General Motors located in Latin
America and Fiat Auto located in Latin America (unless such divestiture
requirement is reasonably regarded to arise out of or be principally due to one
or more acquisitions consummated by General Motors after the Closing Date) or
(ii) such divestiture requirement is reasonably regarded to arise out of or be
principally due to one or more acquisitions consummated by Fiat after the
Closing Date. In the event the sale of the Offered Shares pursuant to the ROFO
Purchase Agreement shall fail to close as a result of the failure to obtain the
necessary approvals under applicable antitrust and competition Laws or to vacate
or lift any Order, Fiat may offer to sell the Offered Shares to General Motors
for a reduced price (the "Reduced Price"). If General Motors accepts such offer,
the parties shall promptly consummate the sale of the Offered Shares at the
Reduced Price in accordance with Section 8.02(b). If General Motors rejects
Fiat's Offer (the date of such rejection being the "Rejection Date"), Fiat shall
be free to sell the Offered Shares in accordance with Section 8.02(d) below and
for such purposes the Offer End Date shall be the Rejection Date and the Floor
Price shall be the Reduced Price.
(d) If (i) at the end of the Offer Period, General Motors
shall not have delivered an Initial Notice to Fiat, (ii) at the end of the Price
Negotiation Period, General Motors shall not have delivered an Offer Notice to
Fiat, or (iii) Fiat shall have rejected any offer to purchase made by General
Motors in the Offer Notice in accordance with Section 8.02(a) (the date on which
the latest of such periods end or such rejection occurs being the "Offer End
Date"), then (1) Fiat may provide to any other Person confidential information
relating to Fiat Auto (subject to the execution of confidentiality agreements on
customary terms and conditions) and (2) Fiat may sell the Offered Shares to any
Person (the "Purchaser"), at a price (the "Floor Price"), which may be in cash
or stock, or a combination thereof, for the Offered Shares no less favorable to
Fiat than that contained in the lower of (x) the Sale Notice or, if delivered,
(y) the higher of the Initial Notice or the Offer Notice and on the same
material terms and conditions specified in the relevant notice and on other
customary terms and conditions. Any such sales may not be consummated except
pursuant to a definitive agreement that is entered into on a date that is not
more than one hundred eighty calendar days from the Offer End Date. Promptly
following consummation of such sale, Fiat will provide General Motors with a
28
copy of such definitive agreement. In connection with such process, the
obligation of the proposed purchaser of the Offered Shares to consent to actions
necessary to secure applicable antitrust and competition approvals may be less
onerous to such proposed purchaser than that contained in the ROFO Purchase
Agreement. If, in connection with such sale, (A) the Purchaser offers to
purchase all the shares of Fiat Auto Holdings Common Stock held by General
Motors for the higher of (i) the same price per share as the Purchaser has
offered to acquire the Offered Shares from Fiat or (ii) if such sale of shares
of Fiat Auto Holdings Common Stock held by General Motors is to occur within
four years after the Closing Date, $2.4 billion, General Motors shall be
required to accept such offer and such proposed sale shall be consummated
simultaneously with the sale by Fiat of all of its Offered Shares to the
Purchaser, or (B) should General Motors require the Purchaser to purchase all
the shares of Fiat Auto Holdings Common Stock held by General Motors for the
same price per share as the Purchaser has offered to acquire the Offered Shares
from Fiat, the Purchaser shall be required to accept such offer and such
proposed sale shall be consummated simultaneously with the sale by Fiat of all
of its Offered Shares to the Purchaser. In any such case, where General Motors
sells such shares to the Purchaser, General Motors shall be liable in proportion
to its percentage equity interest in Fiat Auto Holdings for all breaches of
representations and warranties, breaches of covenants and indemnification
obligations arising under the agreement with the Purchaser or related documents
relating to the liabilities and potential liabilities of Fiat Auto and Fiat Auto
Holdings, but not for any such breach or obligation solely arising out of the
conduct of Fiat and its agents in the course of the Transaction.
(e) During the period after the date on which the Sale
Notice is delivered until the date of delivery of the Initial Notice or the
expiration of the period during which such a notice may be delivered or, if such
notice is delivered, during the Price Negotiation Period, Fiat shall provide to
General Motors such information and access to personnel relating to Fiat Auto as
is customarily provided to an internationally recognized investment bank in
valuing a company. For a period of 45 days after the date on which the Initial
Notice or the Acceptance Notice is delivered and provided that no Offer End Date
shall have occurred, General Motors and its representatives may conduct a
customary legal and financial due diligence investigation of Fiat Auto and Fiat
shall cause to be delivered reasonably promptly any information reasonably
requested to be provided in connection with such investigation. Any such
investigation shall be conducted in a reasonable manner and with a minimum of
disruption to the operations of Fiat Auto.
(f) At any time on or after the ninth anniversary of the
Closing Date and for a period of ten years thereafter, subject to Section 8.06
hereof, but in no event after the nineteenth anniversary of the Closing Date, in
the event Fiat or one of its Subsidiaries enters into an agreement with any
Person who is not an Affiliate of Fiat for the sale of all (or all, other than a
de minimis number of such shares) of its shares of Fiat Auto Holdings Common
Stock (the "Sale Shares"; or (x) if Fiat Auto Holdings proposes to sell all of
the outstanding shares of Fiat Auto Common Stock (or all, other than a de
minimis number of such shares), in which case such shares shall be deemed to be
the Sale Shares and references to Fiat in this Section 8.02(f) shall be deemed
to be references to Fiat Auto Holdings or (y) if FA proposes to sell all of the
outstanding shares of Fiat Auto Holdings Common Stock (or all, other than a de
minimis number of such shares), in which case such shares shall be deemed to be
the Sale Shares and references to Fiat in this Section 8.02(f) shall be deemed
29
to be references to FA), Fiat shall notify General Motors to such effect, no
later than 10 Business Days prior to the closing of such sale. Fiat shall be
permitted to close such sale to such Person. If in connection with such sale,
such Person offers to purchase all the shares of Fiat Auto Holdings Common Stock
held by General Motors for the same price per share as such Person has offered
to acquire the Sale Shares from Fiat or one of its Subsidiaries, General Motors
shall be required to accept such offer and such proposed sale shall be
consummated simultaneously with the sale by Fiat or one of its Subsidiaries of
the Sale Shares to such Person, or should General Motors require such Person to
purchase all the shares of Fiat Auto Holdings Common Stock held by General
Motors for the same price per share as such Person has offered to acquire the
Sale Shares of Fiat, such Person shall be required to accept such offer and such
proposed sale shall be consummated simultaneously with the sale by Fiat of all
the Sale Shares to such Person. In any such case, when General Motors sells such
shares to such Person, General Motors shall be liable in proportion to its
percentage equity holdings interest in Fiat Auto Holdings for all breaches of
representations and warranties, breaches of covenants and indemnification
obligations arising under the agreement with the purchaser or related documents
relating to the liabilities or potential liabilities of Fiat Auto and Fiat Auto
Holdings, but not for any such breach or obligation solely arising out of the
conduct of Fiat and its agents in the course of the Transaction.
(g) If, after delivery of a Sale Notice, Fiat does not
dispose of its Fiat Auto Holdings Common Stock, it shall not deliver another
Sale Notice until one year after the most recent Offer End Date. Notwithstanding
the above, if during such one-year period Fiat receives an unsolicited offer to
acquire its Fiat Auto Holdings Common Stock or Fiat Auto Holdings receives an
unsolicited offer to acquire all or substantially all of the assets of Fiat Auto
Holdings or all of the Fiat Auto Holdings Common Stock, it may deliver a Sale
Notice to commence a new right of first offer process pursuant to this Section
8.02. Any Sale Notice provided to General Motors pursuant to this provision
shall be accompanied by a certified notice of receipt of such unsolicited offer
by Fiat or Fiat Auto Holdings, as the case may be.
SECTION 8.03 Put Option. (a) On two occasions (excluding
any put pursuant to Section 8.07) after the date in the 42nd month following the
Closing Date which corresponds to the Closing Date and prior to the ninth
anniversary of the Closing Date (the "Put Period"), Fiat may require, by notice
to General Motors (the "Valuation Notice"), a determination of the fair market
value (such fair market value, determined in accordance with the procedures set
forth in this Section 8.03, being the "Fair Market Value") of the shares of Fiat
Auto Holdings Common Stock held by Fiat (the "Put Shares"). In such event:
(i) For a period of ten Business Days from the date of
delivery of the Valuation Notice (the "Discussion
Period"), Fiat and General Motors shall negotiate
exclusively with each other, in good faith, in order
to agree on the Fair Market Value of the Put Shares.
(ii) In the event that the parties do not agree on the
Fair Market Value pursuant to clause (i) above,
within two Business Days of the end of the Discussion
Period, Fiat first and General Motors second shall
each appoint (the date of the first such appointment
being the "Appointment Date") an internationally
recognized investment banking firm (an "Appointed
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Bank") from the list set forth in Exhibit 8.03(a)(ii)
(as such list may be updated by mutual agreement of
the parties hereto, the "Approved Banks") and Fiat
and General Motors shall mutually appoint two such
Approved Banks (the "Independent Banks", and,
together with the Appointed Banks, the "Investment
Banks").
(iii) Each of the Investment Banks shall separately
determine its estimate of the Fair Market Value of
the Put Shares, based on the customary methodologies
that such Investment Banks in their professional
experience deem relevant to such a determination, and
governed by the principle that the Fair Market Value
determined by each such Investment Bank must be (or
if the Investment Bank cannot in its professional
judgement make such determination, it shall so advise
the parties in the manner specified below), in such
firm's opinion, fair, from a financial point of view,
to each of Fiat and General Motors and subject to the
assumed parameters set forth in Exhibit 8.03(a)(iii).
(iv) General Motors and Fiat shall prepare the form of the
definitive agreement (the "Put Agreement"),
containing the terms and conditions set forth in
Exhibit 8.03(a)(iv), pursuant to which the sale of
the Put Shares to General Motors will be consummated,
and provide copies to each of the Investment Banks.
(v) Each such Investment Bank shall conduct its diligence
in the following manner:
(A) On or promptly after the Appointment Date,
Fiat shall cause to be delivered to the Investment Banks customary
financial information in type and quantity sufficient to determine
Fair Market Value;
(B) Fiat shall make reasonably available to the
Investment Banks such personnel and additional diligence information
and data as is necessary to permit them to conduct such diligence and
analyses as are customary for this type of determination;
(C) Fiat shall, at a meeting at which
representatives of the Investment Banks and General Motors shall be
present, provide to them the opportunity to discuss management's good
faith expectations as to the operations and prospects of Fiat Auto,
provided that the determination of Fair Market Value or related
analyses shall not be discussed at such meeting; and
(D) General Motors shall, at a meeting at which
representatives of the Investment Banks and Fiat shall be present,
provide to such firms the opportunity to discuss management's good
faith expectations as to the operations and prospects of General
Motors, provided that the determination of Fair Market Value or
related analyses shall not be discussed at such meeting.
(vi) Each such Investment Bank shall conduct its
determination of Fair Market Value in the following
manner:
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(A) Such determination and diligence shall be
performed on a strictly confidential and independent basis and no
Investment Bank shall be permitted to communicate, discuss or review
with any other Investment Bank its own determination, or share any
information relating thereto; and
(B) Other than performing the diligence permitted
in clause (v) above, neither of the Independent Banks shall be
permitted to discuss their determinations or related analyses with
Fiat or General Motors.
(vii) Each of the Investment Banks shall present its final
determination of Fair Market Value to the parties no
later than 20 Business Days after the Appointment
Date, by simultaneously presenting to Fiat and
General Motors, in a sealed envelope, at a time and
place to be mutually agreed by Fiat and General
Motors, its determination of Fair Market Value
(provided that, if an Investment Bank cannot conclude
that there is a Fair Market Value that is fair, from
a financial point of view, to each of Fiat and
General Motors, the parties shall select another
Investment Bank in accordance with the other
provisions of this Agreement and such newly selected
Investment Bank shall, as soon as practicable,
present its determination of Fair Market Value), and,
at such meeting, the two envelopes from the Appointed
Banks, respectively, shall be opened.
(viii) In the event the Fair Market Value estimates
determined by the two Appointed Banks are within 15%
of the higher of the two estimates, the Fair Market
Value shall be the average of the two estimates and
such determination of Fair Market Value shall be
final and binding on the parties.
(ix) In the event the Fair Market Value estimates
determined by the two Appointed Banks are not within
15% of the higher of the two estimates, the two
sealed envelopes from the two Independent Banks shall
also be opened at such meeting.
(x) The Fair Market Value estimate determined by the
Appointed Bank that is furthest from the average of
the estimates determined by the two Independent Banks
shall be discarded.
(xi) The Fair Market Value for the Put Shares shall be an
amount equal to the sum of the three remaining
Investment Banks estimates of Fair Market Value,
divided by three, and such resulting Fair Market
Value determination shall be final and binding on the
parties (the Fair Market Value finally determined
pursuant to paragraphs (i) or (viii) above or this
paragraph (xi) shall be the "Put Price").
(xii) Fiat and General Motors shall each be responsible for
the fees and expenses of the Appointed Bank selected
by such party and for 50% of the fees and expenses of
the two Independent Banks.
(b) Fiat may, within 10 Business Days of the final
determination of the Put Price, in its sole discretion, deliver notice (the "Put
Notice") to General Motors of its intention to sell the Put Shares to General
Motors, and General Motors shall be required to purchase the Put Shares on the
terms and conditions contained in the Put Agreement. If Fiat does not deliver
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the Put Notice within such ten Business Day Period, Fiat will no longer have the
right to sell the Put Shares to General Motors at the Put Price so determined.
(c) Immediately after the delivery of the Put Notice to
General Motors by Fiat, the parties shall execute the definitive Put Agreement.
The closing (the "Put Closing") of the sale of the Put Shares shall take place
promptly after the satisfaction of the regulatory approval and other conditions
set forth in the Put Agreement. At or before the Put Closing, the parties shall
execute such documents as may be reasonably necessary to effect such closing and
to transfer unencumbered and good title to the Put Shares.
(d) (i) The Put Price for the Put Shares shall be payable
in cash or shares of General Motors Common Stock or a combination thereof, at
the option of General Motors. If Fiat requests that the Put Price be paid in
shares of General Motors Common Stock, General Motors shall in good faith
attempt to respect Fiat's preference (but the decision to issue General Motors
Common Stock to pay the Put Price shall in all events be in General Motors's
discretion). If the Put Price is paid in whole or in part in shares, the value
of each such share shall be an amount equal to the average closing price for
such shares during the ten-day period immediately preceding the Put Closing.
(ii) Any portion of the Put Price payable in shares of
General Motors Common Stock shall be payable in full at Closing. Not less than
25% of any portion of the Put Price payable in cash shall be payable at the Put
Closing. The remaining portion may be paid by the delivery of a secured
negotiable senior promissory note in the principal amount of such unpaid portion
and having the other terms and conditions set forth on Exhibit 8.03(d)(ii).
(e) To the extent that General Motors is not adversely
affected, Fiat may, in lieu of selling its shares of Fiat Auto Holdings Common
Stock to General Motors, cause to be sold to General Motors 100% of the
outstanding common stock of Fiat Auto, in accordance with the procedures set
forth in Section 8.03(a), which shares shall instead be the "Put Shares". In
such event, at the Put Closing, Fiat shall purchase all the shares of Fiat Auto
Holdings Common Stock owned by it from General Motors at a price equal to the
percentage of the Put Price which is equal to General Motors's percentage
ownership of the outstanding shares of Fiat Auto Holdings Common Stock which
purchase price shall be payable in the same form of consideration as the Put
Price and valued on the same basis as the Put Price.
(f) During the period after the date on which the Valuation
Notice is delivered until the final determination of the Put Price, Fiat shall
cause Fiat Auto Holdings and its Subsidiaries to provide as soon as reasonably
practicable such information about their business and affairs as General Motors
or the Investment Banks may reasonably request to enable it and its advisors to
conduct a customary due diligence review, such information to be provided no
later than 10 Business Days prior to the time the Fair Market Value estimates
are due. General Motors may provide the analyses resulting from such due
diligence review to all (but not less than all) the Investment Banks during the
course of their determination of Fair Market Value, pursuant to Section 8.03(a).
Fiat need not supply to General Motors information that Fiat reasonably
determines is competitively sensitive under applicable antitrust or competition
law and need only provide such information to the Investment Banks (subject to
any confidentiality obligations by which Fiat or Fiat Auto Holdings and their
Subsidiaries may be bound). Fiat further covenants and agrees that, in
33
responding to requests for information, Fiat will provide information which is
accurate in all material respects (or appropriately qualified if its correctness
or completeness is uncertain) and that it will not intentionally misrepresent
any information which may reasonably be deemed to be material to the
determination of Fair Market Value. The foregoing shall not limit whatever
rights and remedies may otherwise be available to General Motors under the law.
SECTION 8.04 Public Offering. Notwithstanding anything to
the contrary in this Article VIII, Fiat shall be permitted, at any time
commencing 12 months after the Closing Date, to sell Fiat Auto Holdings Common
Stock, and Fiat shall be permitted to cause Fiat Auto Holdings to issue Fiat
Auto Holdings Common Stock, as follows:
(a) Subject to a right of last refusal in favor
of General Motors as discussed in the next sentence, Fiat may sell
Fiat Auto Holdings Common Stock and Fiat may cause Fiat Auto Holdings
to issue Fiat Auto Holdings Common Stock in a public offering (the
shares so offered being the "IPO Shares"). At the time of
commencement of work on the public offering, Fiat shall give General
Motors notice of the proposed offering. Fiat shall keep General
Motors apprised of developments in the offering process, including
informing it of the expected offer price from time to time, and
giving at least three Business Days' prior written notice of the
expected offering date. At the time of the meeting of Fiat and the
underwriters for the purpose of determining the price to the public
of the shares to be sold, Fiat will notify General Motors of the
price that the lead managing underwriter has determined will be the
price to be offered to the public (the "IPO Price"). General Motors
may thereupon offer to purchase the IPO Shares and, if it does so,
Fiat shall sell the IPO Shares to General Motors at the IPO Price.
The closing of the purchase by General Motors of the IPO Shares will
take place on the third Business Day following the proposed offer
date. General Motors will, as between the parties, enjoy all the
benefits which a purchaser of securities pursuant to the prospectus
prepared for the purpose of the offering, would have, as if General
Motors had purchased the IPO Shares in the offering (except that the
shares purchased will retain their character as "restricted
securities" as such term is used under the Securities Act). In the
event that, at the time of the consummation of any sale of shares of
Fiat Auto Holdings Common Stock by Fiat pursuant to a public offering
in accordance with this Section 8.04(a), after giving effect to such
sale, the aggregate number of such shares held by Fiat and its
Subsidiaries and General Motors and its Subsidiaries constitutes less
than a majority of the voting power represented by all shares of Fiat
Auto Holdings Common Stock, Fiat shall no longer have the right to
deliver a Valuation Notice or Put Notice pursuant to Section 8.03.
(b) Fiat may sell Fiat Auto Holdings Common Stock
and Fiat may cause Fiat Auto Holdings to issue Fiat Auto Holdings
Common Stock in a pro rata distribution to its shareholders in
connection with a spin-off, split-off or de-merger of the Fiat Auto
business, provided that 100% of Fiat's interest in such business is
distributed to such shareholders; or
34
(c) Fiat may sell Fiat Auto Holdings Common Stock
and Fiat may cause Fiat Auto Holdings to issue Fiat Auto Holdings
Common Stock in a public offering made, as confirmed by Fiat to
General Motors in writing, in anticipation of a spin-off, split-off
or de-merger of the Fiat Auto business in accordance with Section
8.04(b), provided that after the closing of such offering, (i) Fiat
shall no longer be entitled to deliver a Valuation Notice pursuant to
Section 8.03(a) hereof and (ii) Fiat shall continue to hold, directly
or indirectly, in excess of 50% of the outstanding shares of Fiat
Auto Holdings Common Stock until the distribution contemplated by
paragraph (b) above is consummated.
SECTION 8.05 Freely Transferable. From and after the ninth
anniversary hereof, subject to Section 8.06, the shares of Fiat Auto Holdings
Common Stock held by Fiat and General Motors and shares of Fiat Auto Common
Stock held by Fiat Auto Holdings shall be freely transferable.
SECTION 8.06 Extension. No later than the sixth month prior
to the ninth anniversary hereof, the chief executive officers of Fiat and
General Motors shall meet at a mutually convenient time and place to discuss in
good faith the extension of the rights and obligations of the parties pursuant
to Sections 8.02, 8.03 and 8.04 hereof. In the event no such agreement is
reached, and at such time the shares of Fiat Auto Holdings Common Stock are
publicly traded, then, at the request of General Motors, Fiat shall cause Fiat
Auto Holdings to provide reasonable assistance to General Motors to effect a
public offering of its shares of Fiat Auto Holdings Common Stock. In addition,
General Motors may, in its sole discretion, elect to extend the expiration of
the ROFO Period for a period of 30 months, in which case the Put Period will
also be extended for a period of 30 months and Fiat will be entitled to deliver
one additional Valuation Notice and Put Notice during such extension. General
Motors may elect additional 30 month extensions of the ROFO Period and the Put
Period by giving notice to Fiat at least 30 days prior to the otherwise
scheduled expiration of such period, provided that it shall not be entitled to
elect to extend such period beyond the 19th anniversary of the Closing.
SECTION 8.07 Change in Control. Upon a Change of Control of
Fiat at any time after the Closing Date, General Motors may, in its sole and
absolute discretion, by notice to Fiat:
(a) elect, at any time during the sixth month
period following such Change of Control, to, if such Change of
Control has not received a favorable recommendation of the Board of
Directors of Fiat, treat the Change of Control as the simultaneous
delivery by Fiat of the Valuation Notice pursuant to Section 8.03(a),
in which case all shares of Fiat Auto Holdings Common Stock held by
General Motors, the provisions of such section shall be implemented
and, upon completion of the valuation process set forth therein,
General Motors, by Notice to Fiat, may elect to require that the Put
Notice be delivered to General Motors and the provisions of Sections
8.03(b), (c), (d) and (e) shall be implemented; and
(b) elect, unless General Motors shall have made
the election provided in (a) above, at any time during the six-month
period following such Change of Control, to require Fiat to purchase
all shares of Fiat Auto Holdings Common Stock held by General Motors
35
for cash at a price equal to the higher of (i) the Fair Market Value
of such shares of Fiat Auto Holdings Common Stock determined in
accordance with the procedures set forth in Section 8.03(a)
(recognizing that such shares of Fiat Auto Holdings Common Stock do
not represent control and provided that there is no discount for lack
of liquidity) and (ii) $2.4 billion if such Change of Control occurs
within four years after the Closing Date; provided, however, that (A)
if before General Motors has given Fiat notice that General Motors
has elected to require Fiat to purchase the Fiat Auto Holdings
Common Stock which General Motors owns, Fiat has delivered to
General Motors a Valuation Notice pursuant to Section 8.03(a),
General Motors shall not have the right at such time to require Fiat
to purchase such Fiat Auto Holdings Common Stock and (B) if a
Valuation Notice pursuant to Section 8.03(a) is given after General
Motors has given Fiat notice that General Motors has elected to
require Fiat to purchase its shares of Fiat Auto Holdings Common
Stock and before Fiat has purchased such shares of Fiat Auto Holdings
Common Stock, the obligation of Fiat to purchase such shares of Fiat
Auto Holdings Common Stock shall be suspended and in either case, the
Fair Market Value determination process provided by Section 8.03
shall proceed but, if Fiat does not deliver a Put Notice, General
Motors shall have a further period of 90 days after termination of
such process during which it may make such election (and may also
elect during such further 90-day period to terminate the Joint
Ventures and the Credit Cooperative Agreement in accordance with
Section 5.06(b)).
Notwithstanding any other provision of this Agreement, at such time as General
Motors ceases to own any shares of Fiat Auto Holdings Common Stock, Fiat shall
no longer have the right to deliver a Valuation Notice or Put Notice pursuant to
Section 8.03.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination. This Agreement may be terminated
at any time prior to the Closing Date, notwithstanding any requisite approval of
this Agreement, as follows:
(a) by mutual written consent of each of Fiat
and General Motors;
(b) by either Fiat or General Motors, if the
Closing Date shall not have occurred on or before December 31, 2000;
provided, however, that the right to terminate this Agreement under
this Section 9.01(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing Date to occur by
such time;
(c) by Fiat, upon a breach of any representation,
warranty, covenant or agreement on the part of General Motors set
forth in this Agreement, or if any representation or warranty of
General Motors shall have become untrue, in either case such that the
conditions set forth in Section 7.02 are not capable of being
satisfied on or before December 31, 2000;
36
(d) by General Motors, upon breach of any
representation, warranty, covenant or agreement on the part of Fiat
set forth in this Agreement, or if any representation or warranty of
Fiat shall have become untrue, in either case such that the
conditions set forth in Section 7.03 are not capable of being
satisfied on or before December 31, 2000; or
(e) by either Fiat or General Motors, if any
Governmental Authority shall have issued an Order or taken any other
action permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement, and such Order or
other action shall have become final and nonappealable.
SECTION 9.02 Effect of Termination. In the event of
termination of this Agreement pursuant to Section 9.01 hereof, except for
Sections 6.09 and 9.05, which shall survive any such termination, this Agreement
shall forthwith become void and there shall be no liability under this Agreement
on the part of any party hereto or any of their respective officers or directors
and all rights and obligations of each party hereto shall cease; provided,
however, that nothing herein shall relieve any party from liability for the
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 9.03 Amendment. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 9.04 Waiver. At any time, any party hereto may (a)
extend the time for the performance of any obligation or other act of any other
party hereto, (b) waive any inaccuracy in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any agreement or condition contained herein. Any such extension
or waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
SECTION 9.05 Expenses. Except as otherwise provided in
Section 8.03, all expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses, whether or not the Transactions are consummated.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement and
any certificate delivered pursuant hereto by any person shall survive the
Closing Date indefinitely or until the expiration of the applicable statute of
limitations.
SECTION 10.02 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given or made (and shall be deemed to have been duly given or made upon receipt)
by delivery in person, by facsimile, by e-mail, and confirmed by overnight
courier service to the respective parties at the following addresses (or at such
37
other address for a party as shall be specified in a notice given in accordance
with this Section 10.02):
if to Fiat:
Fiat S.p.A.
▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
Telecopier: (▇▇) ▇▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Financial Officer
e-mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
e-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
and
Grande ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
Telecopier: (▇▇) ▇▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
e-mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇
if to General Motors:
General Motors Corporation
Mail Code 482-C25-D81
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: 313-667-3188
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
& General Counsel
e-mail: ▇.▇▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇
38
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
e-mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
SECTION 10.03 Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced by any rule
of Law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 10.04 Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned (except by operation of law or to a
successor in interest in connection with the transfer of all or substantially
all of a party's business to a Person which assumes all of its obligations
hereunder); provided, however, that either party may assign its rights and
obligations under this Agreement to a Permitted Transferee, so long as such
party remains liable for the performance of such obligations; and provided
further that Fiat may assign its rights and obligations under this Agreement to
any Person who acquires all Fiat's holdings of Fiat Auto Holdings Common Stock
pursuant to Article VIII hereof, in which event Fiat shall be released from all
further obligations hereunder, except for its obligations under Section 6.09,
Article III and, insofar as relates to these obligations, this Article X.
SECTION 10.05 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and their
respective permitted successors and assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
SECTION 10.06 Specific Performance. The parties hereto
agree that irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
SECTION 10.07 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
excluding (to the extent permissible by law) any rule of law that would cause
39
the application of the laws of a jurisdiction other than the State of New York.
SECTION 10.08 Mediation. In the event of a dispute arising
out of or in connection with this Agreement, prior to the exercise of any other
remedies hereunder or at law, the party hereto seeking a remedy against the
other party shall request that the dispute be submitted to the chief executive
officers of the two parties by notice to such effect to the other party. The
chief executive officers of both parties shall meet within twenty Business Days
of such notice in a neutral setting in person to attempt in good faith to
resolve such matter. In the event that they have been unable to resolve such
matter within ten Business Days after their meeting, either party may seek the
legal remedies entitled to them hereunder or at law.
SECTION 10.09 Consent to Jurisdiction. (a) Each of Fiat and
General Motors hereby irrevocably submits to the exclusive jurisdiction of the
United States District Court for the Southern District of New York, located in
New York City, for the purpose of any action or proceeding arising out of or
relating to this Agreement and each of Fiat and General Motors hereby
irrevocably agrees that all claims in respect to such action or proceeding may
be heard and determined exclusively in such federal court. Each of Fiat and
General Motors agrees that a final judgment in any action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(b) Each of Fiat and General Motors irrevocably consents to
the service of the summons and complaint and any other process in any other
action or proceeding relating to the transactions contemplated by this
Agreement, on behalf of itself or its property, by personal delivery of copies
of such process to such party. Nothing in this Section 11.09 shall affect the
right of any party to serve legal process in any other manner permitted by law.
SECTION 10.10 Counterparts. This Agreement may be executed
and delivered (including by facsimile transmission) in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 10.11 WAIVER OF JURY TRIAL. EACH OF FIAT AND
GENERAL MOTORS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF FIAT
AND GENERAL MOTORS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT THEREOF.
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IN WITNESS WHEREOF, Fiat and General Motors have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
FIAT S.p.A.
By: /s/ Paolo Fresco
-------------------------------------------
Name: Mr. Paolo Fresco
Title: Presidente del ▇▇▇▇▇▇▇▇▇ di
Amministrazione
GENERAL MOTORS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------------
Name: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chairman & Chief Executive Officer
41